India-Germany

 

Snapshot of relations

 

  • Bilateral relations between India and Germany are founded on common democratic principles and are marked by a high degree of trust and mutual respect
  • India and Germany have a “Strategic Partnership” since 2001, which has been further strengthened with the Inter-Governmental Consultations (IGC) at the level of Head of Governments (German Chancellor and PM) which allows for a comprehensive review of Cooperation and identification of new areas of engagement

 

Areas and Instruments of Cooperation

  • Political Cooperation
    • Parliamentary Exchanges
      • There is an Indo-German Parliamentary Friendship Group, in the German Bundestag since 1971.
      • The Indo-German Parliamentary Friendship Group (constituted in May 2018) for the present term of German Parliament consists of 24 Members from all the six parties represented in the German Parliament. Visit by Parliamentarians from both sides take place regularly
    • Institutional Arrangements
      • Several institutionalized arrangements exist between India and Germany, to discuss bilateral and global issues of interest namely, Foreign Office Consultations, High Defence Committee, Indo-German Energy Forum, Indo-German Environment Forum, S&T Committee, and Joint Working Groups in various fields, including skill development, automotive, agriculture, coal, tourism, water and waste management
      • Both countries consult each other and coordinate positions in multilateral forum, including G-20 and in the UN on global issues such as climate change, sustainable development, etc.
      • India-Germany meet on the side lines of G-4 as well, to discuss on important issues
Did you know?

The G4 nations, comprising Brazil, Germany, India, and Japan, are four countries which support each other’s bids for permanent seats on the United Nations Security Council

      • There have been consultations between the two countries on regional and international issues such as UN issues, International Cyber Issues, Disarmament & Non-proliferation, Export Control, East Asia, Eurasia, Africa etc.
    • Defence Cooperation
      • India-Germany Defence Cooperation Agreement (2006) provides a framework for bilateral defence cooperation.
      • To further enhance the Defence Industry and defence cooperation between Germany and India, an Arrangement on Implementation of the Agreement, concerning Bilateral Defence Cooperation was signed on February 12, 2019 during the visit of Raksha Mantri to Berlin
        • The agreement will enable both the countries to share classified information with each other
      • India and Germany maintain an ongoing dialogue in the areas of commercial maritime security and cooperation in the field of anti-terrorism
      • Recently, The Indian Navy and the German Navy carried out a joint exercise in the Gulf of Aden near Yemen, in the Indian Ocean leg of Indo-Pacific Deployment 2021. The Indian Navy was represented by frigate “Trikand” while the German Navy was represented by frigate “Bayern”.
    • Economic & Commercial Relations
      • Germany is India’s largest trading partner in Europe, with a total trade of USD 21.07 Billion in 2020-21, occupying 17.4% of share in European Market
      • Germany is the 7th largest foreign direct investor in India since April 2000
        • Germany’s total FDI in India from 2000 until 2019 amounted to US$ 11.9 billion
      • In 2021 India imported €946M and exported €944M from Germany, resulting in a negative trade balance of €1.8M
        • The top imports of India from Germany were Measuring and Automated control instruments (€74.3M), Other machinery (€71.5M), Machinery for electricity production, distribution (€65.4M), Aircraft (€57.9M), and Other prefabricated chemicals (€55.7M)
        • The top exports of India to Germany were Other prefabricated chemicals (€53M), Basic pharmaceutical products (€46.6M), Apparel of knitted or crocheted fabrics… (€43.2M), Chassis, bodies, engines etc. for motor… (€41.3M), and Other textile products (€36.8M).
      • For facilitating trade, a Fast-Track System for German companies has been operating in Department for Promotion of Industry and Internal Trade (DPIIT) since March 2016
      • India and Germany signed a Joint Statement in 2019 to set up a Fast-Track system for Indian Companies in Germany
      • To facilitate the entry of German Mittelstand (Medium Sized Companies) in India, the Embassy of India, Berlin runs the Make in India Mittelstand (MIIM) Programme since 2015.
      • In future, Germany’s role in reviving the India-EU free trade talks i.e Bilateral Trade and Investment Agreement (BTIA) will be very crucial.
        • Also, Germany has also agreed to intensify efforts for an early conclusion of an Investment protection agreement between the EU and India.

 

    • Science & Technology
      • Indo-German Science & Technology cooperation started with the signing of the Intergovernmental S&T Cooperation Agreement in 1971 and 1974
      • There are more than 150 joint S&T research projects and 70 direct partnerships between Universities of both countries.
        • India’s scientific establishments have close partnerships with German R&D institutions, including the Max Planck Society, Fraunhofer Laboratories and the Alexander von Humboldt Foundation.
      • Recently, Germany has announced new development commitments to the tune of more than EUR 1.2 billion (approx. INR 10,025 crore) to aid India’s fight against climate change and for cooperation on clean energy
    • Culture
      • India and Germany have a long tradition of academic and cultural exchange
        • Max Mueller was the first scholar of Indo-European languages to translate and publish the Upanishads and the Rigveda.
        • German interest in the Indian philosophy and languages resulted in the setting up of the first Chair of Indology at the University of Bonn in 1818.
        • The Government of India has funded 31 short term rotating chairs of Indian studies in German Universities so far
      • There has been growing interest in Germany in Indian dance, music and literature, as well as motion picture and TV industry
        • Indian films and artists regularly feature at the Berlin International Film Festival and at Indian Film festivals held in other parts of Germany
    • Development Cooperation
      • Germany has been an important development cooperation partner for several decades
        • Energy, sustainable economic development and environment & management of natural resources are priority areas
      • Financial assistance from Germany is mainly as soft loan, composite loans or grants routed through German Government’s Development Bank
      • Major projects are in the sectors of energy (Renewables, Green Energy Corridor), Indo-German Solar Partnership, Skill Development and Sustainable urban development (water/sanitation/waste, climate friendly urban mobility, smart cities).
      • Germany supports India’s reform policies geared towards inclusive, regionally and socially balanced growth.
        • As concrete steps in this direction Germany, in collaboration with Indian partner institutions, is actively supporting development and strengthening of financial systems in rural areas, social policy instruments especially for the unorganised sector, and promotion of small and medium-sized enterprises as well as microfinance institutions.
        • In this framework, the German development cooperation is actively supporting the reform of rural cooperative banks implemented by the National Bank for Agriculture and Rural Development (NABARD).
        • It is also providing support for many aspects of promotion of small and medium enterprises (SMEs) in collaboration with the Small Industries Development Bank of India (SIDBI).

Challenges/Roadblocks

    • Historical
      • Earlier, Cold War politics, as well as the lack of development in India caused German governments to treat the world’s largest democracy with indifference for many years
    • Political
      • Since 2000, India has not been very dependent on extensive relations with Germany, as the former Soviet Union dominated Indian bilateral relations to a large extent
      • As the world changed in the early 1990s, India reacted promptly and adapted well to the new situation, whereas Germany did not realize the opportunities vested in trade, science and technology and defence cooperation with India, and instead concentrated on the People’s Republic of China.
      • The relation between Germany and India as a whole are somewhat dysfunctional and unable to move forward
        • Core documents overtly focus on close economic relations; while cooperation in other fields offer little more than a forum for the exchange of ideas and best practices rather than focussing on substance
      • Also, India has “flown” under the radar of many German politics
        • What is mostly amiss is a continuous strategic interaction at various levels, states, civil society, parliamentarians
      • Also, Germany is expressed concerns about Kashmir lockdown and the rights of minorities in India and has begun to cast a shadow over the “shared political values” (freedom and the rights of minorities) with India
    • Economical
      • Further, Germany and European Union are sceptical about India’s trade liberalization measures, as Germany and EU bat for more liberal labour regulations
      • India had recently celebrated remarkable improvements in the ease of doing business, indicating its willingness to remove bureaucratic hurdles. However, technical regulations in trade like testing requirement are real burden for German Companies

India-Germany: The Future Ahead

    • Presently, the Indo-German partnership somehow seems to lack the momentum to leap forward
      • It’s been on a springboard for a while, and has much potential to fulfil.
      • In the current period, some reengagement appears necessary. In this context, if some big ideas, which emerged between India and Germany, were to be successfully implemented, it could perhaps create a wider and deeper paradigm of Indo-German partnership.
    • Collaboration in High Speed Railways(HSR)
      • German technology is acceptable in India, its companies are well known, and there is no apparent commitment to use only Japanese technology for all HSR in India.
      • If the German proposal succeeds in a cost-effective manner, it could open business opportunities in six more HSR projects in India
    • Efforts towards making Germany a reliable Defence Industry Partner
      • German Howaldtswerke-Deutsche Werft (HDW) submarines are in India.
      • Now Germany remains keen to provide the six API submarines required by the Indian navy. ThyssenKrupp Marine Systems is leading the German thrust to enhance the Indo-German partnership in defence production
      • The Indian Defence Ministry needs to consider this proposal, to further add considerable momentum to Indo-German relationship
    • Towards Multi-Polar World order
      • Amidst the policy uncertainties of USA, and the regional dominance of China, both India and Germany could coordinate towards a win-win situation
      • Also, Post Brexit, Germany is an important player in European Union. Therefore, engaging Germany is not just about India’s bilateral relations with it. It is about collaborating with the Germany led EU as a whole